Italy: Renewed focus on tariffs and transfer pricing interplay after Trump measures

Multinational groups may need to reassess their strategies in the wake of the US president’s sweeping tariff changes. Federico Vincenti and Carola Valente of Valente Associati GEB Partners/Crowe Valente outline ways to mitigate the impact.

The recent introduction of higher tariffs by the Trump administration has brought renewed attention to the interrelationship between transfer pricing and customs duties.

In international transactions between related parties, both direct taxation and customs duties – although based on different approaches to defining transfer pricing – require that the value of goods is not influenced by the corporate relationship between the parties involved. Therefore, in the case of purchase and sale transactions between related entities, the price of the goods exchanged must still comply with the arm’s-length principle, meaning it must not be affected by the existing relationship between the companies. The price must be determined as it would have been between entirely independent parties under conditions of free market competition.